By Candice Zachariahs
Nov. 6 (Bloomberg) -- The euro may climb as much as 3 percent against the dollar after finding support at its 55-day moving average, Citigroup Inc. said, citing trading patterns.
Recent declines in Europe’s single currency stalled Nov. 3 at the 76.4 percent Fibonacci retracement of the rally from the euro’s Oct. 2 low of $1.4481 to its Oct. 26 high of $1.5063, Citigroup said. The euro may now gain to $1.5064 with a “firm” break of that level opening up a move to $1.5285, analysts Tom Fitzpatrick and Aron Gera in New York and London-based Shyam Devani wrote in a note to clients yesterday.
“At this stage it appears as though the correction down is over and the general uptrend is back in play,” according to the Citigroup team, led by chief technical analyst Fitzpatrick. “The recent highs at $1.50-plus will be tested again.”
The euro traded at $1.4870 as of 8:29 a.m. in Tokyo and has a 55-day moving average of $1.4661.
In technical analysis, investors and analysts study charts of trading patterns and prices to forecast changes in a security, commodity, currency or index. Fibonacci charts are based on the theory that securities tend to rise or fall by specific percentages after reaching a new high or low.
To contact the reporter on this story: Candice Zachariahs in Sydney at czachariahs2@bloomberg.net
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